Kathleen M. Hamann

An Investigation in Sheep’s Clothing: Multilateral Development Bank “Audits”

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Enforcement actions against international construction companies have been on the rise in recent years, culminating in the headline-grabbing $3.5 billion joint U.S./Brazilian action against Odebrecht S.A. in late December 2016.  Less prominently, however, enforcement actions against construction companies by the multilateral development banks (“MDBs” – such as the World Bank and the European Bank for Reconstruction and Development) have also risen sharply, and in many cases have been putting companies out of business.  Here are some basics you should know in case you ever get a letter from an MDB saying you are about to be “audited.” 

It’s Not an Audit
The letter a company will receive launching this kind of investigation will usually say that the integrity office (as the enforcement arms are generally known) is conducting an “audit” of a particular project.  This is unlike any audit you have ever experienced – because it is actually a full-blown investigation that in many ways resembles an investigation by